July Flash PMI: Modest Deceleration

French July flash PMI data disappointed to the downside, with faster-than-expected deceleration: Services of 57.0 (vs 58.8 exp., 57.8 prior); manufacturing of 58.1 (58.3 exp., 59.0 prior), and composite of 56.8 (58.4 exp., 57.4 prior).

• From the IHS Markit report: "Growth was spurred on by further intakes of new business, which grew at one of the fastest rates seen in over three years. Service sector output growth continued to surpass that seen in the manufacturing sector amid looser lockdown restrictions. That was in spite of a faster increase in goods production."
• On employment: "French private sector businesses increased their workforce numbers during July. Staffing levels grew at a modest pace across both manufacturers and service providers, although in both cases rates of job creation slowed compared to June."
• On prices: "As a consequence of ... supply chain issues, French private sector companies observed rising input costs during July. By sector, manufacturers recorded substantially faster input price inflation than service providers, but in both cases price gains were firmer than in June. Overall, private sector input cost inflation was the strongest since May 2011. Firms continued to pass higher costs on to their clients through increases in their selling prices. That said, the extent to which output charges were raised was marginally softer than in June."